Meals tax: ‘tough sell’

Members of the Culpeper County Board of Supervisors are convinced that a proposed meals tax is the best way to stave off possible real estate and personal property tax hikes.

So on Election Day, for the fourth time in four years, voters will decide if they’ll be willing to pay up to four percent more for prepared foods and snacks.

“I don’t know what the chances are going to be,” said Jefferson District Supervisor Brad Rosenberger, but “I hope that it does pass.”

Background
In August, the Board of Supervisors accepted a recommendation from the county’s Rules Committee, agreeing to place the question up for a vote.

In November 2004, 2005 and 2006, county voters defeated the measure by a margin of about 11 percent, according to the county’s Web site.

If approved, the supervisors would then enact an ordinance imposing the tax. By law, the tax could not exceed 4 percent of the total of the purchase. For a $6 fast food meal, that equals about 24 cents.

For a meal that costs $40, that would equal about $1.60. Groceries and packaged foods would be excluded. Only businesses in the county would be affected; patrons of town businesses already pay a similar tax.

“I think that people that eat in town don’t even realize it — you’re paying it every time,” said Cedar Mountain District Supervisor Larry Aylor, who added that it might “level the playing field” between county and town restaurants.

“Culpeper’s become a destination, and (visitors are) spending their money, Aylor said. “When they’re in town, the town’s getting that, and when they go out in the county, we’re not.”

Stevensburg District Supervisor and board chairman Bill Chase agreed.

“I think that people don’t understand it. That’s the reason that people haven’t passed it in the past.”

It is not clear how much potential revenue a county meals tax might generate because no formal revenue projections have been made, but Rosenberger described it as significant. Most of the restaurants in the county are well-known national and regional chains that occupy the Bus. 29 corridor just north of downtown.

And with more state funding cuts to critical projects likely, Aylor said that governments are left with few options to maintain their revenue stream.

“You’re getting less money — that’s got to be made up somehow — or you have to not be able to provide the same level of service,” he said.

Supervisor: ‘Tough sell’
With the economy still gasping for air under the weight of the financial crisis, the supervisors acknowledged that residents probably aren’t in the mood to even consider parting with more money.

“I think it’s going to be a tough sell,” said Catalpa District Supervisor Sue Hansohn. “Even though I believe it’s a good idea and a way to offset real estate taxes, in this economy people are going to look at it and be like, “Oh Lord — another tax.”’

On Friday, Aylor, who said he voted absentee because he might be out of town on Election Day, said he encountered an older lady as he was leaving the registrar’s office.

“She looked at me and said, ‘I didn’t vote for that meal tax’ ” he said. “I think people just don’t understand how they could benefit from it. To maintain services at the same level with less revenue, your only choice is to raise taxes,” he said.

In April, supervisors approved a 9-percent tax increase on personal property. That means the tax bill for a home valued at $300,000 would increase about $150 per year.

Rosenberger said from what he’s heard, the reticence of residents to pass the measure is due to the perception that it’s a way to gain increased revenue. He said the intent is to avoid having to raise other taxes.

“Of course we’re cutting (expenses) too, and it’s going to continue, but that’s the only thing we have,” he said. “There’s nothing else to tax. If you had this, it would help take the burden off the others. It’s not to try to gather more money, the purpose is to try to keep from having to put more and more on real estate and personal property.”

Chase said the money would go into the general fund and that it would help increase revenue.

“I think if people understand it, they’re going to vote for it,” said Chase, “but they see the word ‘tax’ and they go up in the air. I just feel it’s absolutely critical.”

Regardless of its nomenclature, Chase said he wished people would consider it more of a user fee. “You eat out by choice,” Chase said.

Another try unlikely
While everyone stopped short of predicting the outcome, if the measure fails again, Hansohn said it’s probably time to let it go for now.

“I’d have grave reservations about putting it back on,” she said.

Aylor said he would consider introducing it again in lieu of raising other taxes. Doing so would be legal, said County Attorney Roy Thorpe.

“Although, in 2006, the General Assembly considered limiting the number of times referenda may be held to authorize a county meals tax, the restriction was never enacted,” said Thorpe. “The question can therefore be placed before the voters repeatedly.”

Meanwhile, consideration of an unprecedented town-county deal continues. Introduced this summer, the agreement would allow the town — which already charges a meals tax — to expand its borders.

In exchange, the town would hand over control of its sewer and water infrastructure to a yet-to-be formed authority that would oversee all aspects of sewer and water for both the town and county.

Nate Delesline III can be reached at 825-0771 ext. 110 or .